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Swiss retail banks benefit from the current interest rate environment – yet sustainable value creation requires higher profitability
In this year's IFBC Sector Report - Swiss Retailbanking, we once again provide you with our latest assessments of the financial performance and value-creation of Swiss retail banks. In addition, the share prices and valuations of listed Swiss retail banks are analyzed. The published annual financial statements of 54 retail banks provide a comprehensive data basis. We trust you will gain interesting insights and look forward to being available to you for a dialog.
Increasing cost pressure is to be expected, particularly due to necessary investments in digitalization and increasing regulatory requirements. To ensure or improve future profitability, Swiss retail banks should therefore continue to focus on cost efficiency as a key value driver. The expected normalization of net interest income should be countered with proactive cost management and income diversification.
The takeover of Credit Suisse has once again shaken confidence in the Swiss banking sector, which offers Swiss retail banks the opportunity to position themselves as an attractive alternative to the new big bank. However, there has not yet been a strong inflow of assets in 2023 on average. The positioning as an alternative to the new big bank must therefore be further promoted.
There is a consensus in the banking sector that an increase in regulatory requirements is to be expected as a result of the merger of UBS and Credit Suisse. According to Thomas Jordan, President of the Swiss National Bank, the profitability of banks should be given a higher priority in regulation in the future. Swiss retail banks should therefore use the opportunities created by the past year to sustainably increase their profitability.
Due to the increasing requirements in the areas of digitalization (in particular customer expectations of a digital offering and cyber security) and regulation, it is to be expected that the cost pressure on Swiss retail banks will continue to intensify. Against this backdrop, Swiss retail banks must now focus more on their own cost efficiency in order to maintain or increase profitability in the event of a deterioration in the interest rate environment.
IFBC Sector Report - Swiss Retailbanking
(The document is available in German only.)
More information about Banking
Also of interest to you, our article on increasing profitability.
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